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ALI VELSHI, CNN HOST, YOUR MONEY: Welcome to this special emergency edition of YOUR MONEY. I'm Ali Velshi. CHRISTINE ROMANS, CNN HOST, YOUR MONEY: I'm Christine Romans. To say Wall Street is shaky is an understatement. We saw yet another week of wild swings in the financial markets both in the U.S. and around the world.

VELSHI: Instead of saying the Dow is down this amount or up that amount we want to talk about what it really means to you folks sitting in your homes watching us right now.

ROMANS: Gary Ambrose is a senior financial consultant from Personal Capital Management and Greg Olsen is partner at the Wells Management from Lenox Advisers and Lakshman Achuthan is with the Economics Cycle Research Institute.

All right. Gentleman what does it mean when the Dow is up and down, it drives people crazy. It makes headlines and we see all of this electric language in the newspapers. You know, Gary, let me start with you. What are your customer's clients asking and what are you telling them?

GARY AMBROSE, PERSONAL CAPITAL MANAGEMENT: What it means it is a loosing night to sleep that is what it means. It means there's this anxiety, they're nervous with stress levels and they are calling and finding most are now beginning to call just with some level of reassurance. What do I have in my portfolio that will ride this out? Well, what I can use for the next year or two to get me through this? Am I going to be OK?

VELSHI: Those sound like exactly the key questions.

AMBROSE: They are wonderful questions.

VELSHI: Are there things out there that they can buy that will ride them through the storm? How do you find that?

AMBROSE: Absolutely. I mean if a client has allocated appropriately going in, there should be very little change right now. They need to have adequate liquidity and adequate income in things that are quality. Not things that we think might be quality for some insurance agency told us so and keep them in that manner. If they can do that, then they know they'll be able to sleep tonight and they'll be OK for the next few years and they know that in a few years from now the market will come back and they'll be fine. If they've knocked that level of confidence, what they'll do is start selling out dramatically and it is going to hurt them.

ROMANS: You said they have to have adequate liquidity and what does that mean and how much is adequate liquidity?

AMBROSE: We always like the one year of expenses rule of thumb. You need to be able to know that no matter what happens in your world you have one year of expenses to breathe, that is your rent, your mortgage, whatever your current level, your basic tuition for this year, that way you don't need --

VELSHI: It should be a big chunk of cash.

Greg makes the point that some of the selling that you're seeing here in the United States and around the world is companies that didn't have the cash that they need or investors who didn't have the cash so they're forced to sell their stocks even at lower prices to liquidate because they need the money for someone else. The other day Warren Buffett said be fearful when others are greedy and greedy when others are fearful. You're saying there is the opportunity. Because some people are having to get out of the market.

GREG OLSEN, LENOX ADVISORS: The market right now is not trading on fundamentals. It's trading on fear and there are a lot of people out there that have to sell. They have to sell because they have to liquidate their positions because they need money for margin calls or what have you and then there are people out there that see the market going down that don't have to sell that now say oh, my gosh, I can't lose any more money. I can't sleep at night. Get me out even though they talk with their financial adviser and they have a 15, 20, 25-year time horizon for the money. It doesn't make any sense and then that same person says I'll get back in when the markets calm down. What does that mean?

Does that mean when the Dow is 3,000 points higher you'll feel comfortable getting back in it doesn't make any sense.

VELSHI: Lakshman this all comes back to recession fears in the economy and where are we now? Nobody studies business cycles as much as you do. Where are we now? How bad is this and how long will it take?

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Well in the U.S. you're nine months into a recession. It's been mild up until recently it's starting to intensify. When you step away from the U.S. and you see Europe, the UK and Japan all in recession. Big emerging markets are still slowing. They're not in recession, they are still growing, but they are slowing quite a bit. That's where we are.

Looking forward. We see the forward-looking indicators and some of them by the weekly leading index have two weeks of the financial panic in it already showing us what are the fundamentals looking forward. There's no upturn in sight. That's the bad news. The good news is we can't see that far. We can only see a quarter or maybe two. This goes into '09.

VELSHI: Six months is out as far as it gets. ACHUTHAN: So it's possible that there's a bottom in '09 and we don't have objective evidence of it yet and we're still working through the housing crises correction and the job losses.

ROMANS: Investors you know markets hate uncertainty and here is the uncertainty. How deeply will this be salvaged around the world? What will the numbers look like and when does it finish what sectors will be taken down and the more we don't know is the more this whole thing gathers.

ACHUTHAN: There's a bit unloading for investor confidence and what we do know so far with the data in hand is it will intensify near-term. Industrial sector globally is taking a huge hit. They are oil and other and metals. These are plunging here very, very quickly and probably overdoing it.

ROMANS: That's telling us that the economy will be so weak that there will not be demand for these things.

ACHUTHAN: Exactly. Who is buying a car right now? Not too many people. It's not that it's in the market when we talking about value and equities just a moment ago. Look at the home sales data out this week. We're seeing activity transactions.

VELSHI: They're down. Below $200,000 for an existing home in the United States for the first time in 11 years, but sales are starting. In other words, there's a decision being taken there by some value buyers. Some of these homes are being sold at foreclosure.

Perfect. That brings us to a point where now we -- that was our doom and gloom moment. Now we're going to talk about opportunity because for each of you I've heard something that says there is some opportunity on the horizon whether it's an investment or a home or a way to reallocate your assets. Stick around. We have a lot more to talk about when it comes to recession proofing your money.

ROMANS: Absolutely. And the race to the White House debating which candidate could be better for your money.

(COMMERCIAL BREAK)

ROMANS: Welcome back to this special emergency edition of YOUR MONEY. Back with us now Lakshman Achuthan is with the Economic Cycle Research Institute.

VELSHI: Gerry Ambrose is a senior financial consultant for Personal Capital Management and Greg Olsen is a partner with the wealth management firm Lenox Advisers. For those of you who have been watching us we talked to these gentlemen about where we and are how bad things might be, but honestly you're probably tired of hearing it.

ROMANS: I'm tired about hearing how bad things are.

VELSHI: Want do you want to know.

ROMANS: I want to know what I can do right now to make sure that I don't get the short end of what could be an ugly 2009. Gary.

AMBROSE: Christine that is a great question. Most important is get your house in order. In other words, if there are things you've been doing wrong until now you might be able to get away for with it for the last couple of years but maybe not for the next couple of years. If your debt is out of control, rein it back in. If you've got some variable mortgages in there you might need to consolidate perhaps -- I never liked variable mortgages anyway, especially when interest rates were so low historically and a wonderful time it's been the last couple of years to lock in a fixed rate.

Don't blow it; take advantage of this rate now. Also, I'm hearing that people are cutting back on expenses, which is fine. They're cutting back on their insurance coverage and this is absolutely the time you do not want to do that. Make sure your own home is in order.

VELSHI: Greg, investment opportunities out there. Let's talk to the average person who is not a sophisticated investor because they do something else for a living and maybe you have a 401(k). We all do something else. What would you advise someone to start asking rather than sort of what specific stocks to buy? How does one protect themselves in this market?

OLSEN: The first thing I would advise people not to do is don't try to day trade this market because it's whipsawing around and it's up 400, whatever it is. Don't try to grab an opportunity just because you think you can make 10 or 20 percent on a stock. Invest long-term and if you have a long-term time horizon there's no reason why you can't start putting some money to work here because the levels look very attractive. You have to remember that oil prices were at $147 barrel and now we're in the 60s. My gosh, that is a tax cut.

VELSHI: Sure.

ROMANS: It's almost a stimulus.

OLSEN: Really, that will work its way down to every day Americans. For people that are retiring and receive Social Security, that got a 5.8 percent bump for 2009 and that will be great for seniors because they'll see the real spending dollars for things such as food and fuel come down, but yet their checks will go up by 5.8 percent. That's a real positive.

ROMANS: That's about $63 a week on average, $63 a month on average. That's the increase of some of the costs that have come down.

That is good news for seniors. Let me ask you Gary about this is not the time to take risks in your job. This is not the time you'll be taking risks with your money. This is not -- a couple of people told me this is not a time to be taking risks with your marriage. Is that the time to get things settled? Specifically, let me ask you about insurance. We haven't talked about this at all. Is this the time to have the proper health insurance, the proper life insurance to make sure your family is taken care of and all of the way downs the line?

AMBROSE: Batten down the hatches. Exactly right. This is a great opportunity to do that. These things were not important because we are so tuned to the board behind you and we are so looking at what the Dow is doing every six minutes of the day. They are not paying attention to things that are really important so yes, be careful about life insurance and make sure you're not cutting down on that. Health insurance especially if you might lose your job. What will you do then? So find out now what your alternatives are. Be prepared in the event of that eventuality that might occur. Property casualty, same thing, goes down the board and make sure there's no gap.

VELSHI: All right. Guys let's stop on that point. We have a lot more to discuss here, Lakshman, Greg and Gary we'll bring our panel back later with more important information about your money and specifically your job.

ROMANS: And there is an election, we also want to focus of the presidential race and how it affects the economy and your money. We'll debate which candidate is better for you.

VELSHI: And as we said jobs specifically, how to get one and how to keep one and important information for you that is very specific. Stay with us.

(COMMERCIAL BREAK)

ROMANS: Election Day is a little over one week away. Who's counting, down to the minute?

VELSHI: As we continue to see seismic shifts in these markets here and abroad, the economy is without a doubt, issue number one for so many of you out there.

ROMANS: Sixty one percent according to the latest CNN poll. Both presidential candidates desperately trying to convince you, the voter that they've got what it takes to fix this mess.

VELSHI: I'm not sure they're hit a home run with this one. We'll talk to some people who do know about this. Eamon Javers is with Political, we are joined by two CNN contributors, Leslie Sanchez on the right, Hillary Rosen on the left. Welcome to all of you.

Let's try and make sense of this because Christina and I have been talking about this that there are clearly very smart people advising these candidates on the economy and very smart people who really know how they might fix things. But Leslie, you said something to us before we started here. You said -- you don't wish this on anybody. Either of these two candidates are going to inherit a very ugly economy.

LESLIE SANCHEZ, CNN CONTRIBUTOR: Horrendous economic calamity. It limits tremendously the amount they can push forward both in their domestic policy ideas and retooling government because of the financial burden they put on taxpayers with this rescue package and also the other inclinations of whether or not the federal government is designed to create jobs. You're looking at Barack Obama who is looking -- he says reducing taxes on 95 percent and he talks about that, but with the Democratic Congress there's a lot of the skepticism on one is this the right approach? And two, is that threshold of $250,000 for taxpayers going to be reduced to $200, $150,000, where does it really end?

VELSHI: Hillary let's talk about that for a second. Can either of these two candidates live up to their promises to cut taxes, I suppose they can but that will increase the debt.

ROMANS: Is it just good politics to say I'm going to cut your taxes?

VELSHI: We may not be able to cut your taxes but then you're definitely not going get elected.

HILLARY ROSEN, CNN CONTRIBUTOR: You're not going win.

VELSHI: What do you think Hillary?

ROSEN: Well, I think as a practical matter, Senator Obama's talked about paying for his tax cut in multiply ways and you know I think a couple of things happened right after the election. First of all, financial markets hate uncertainty and the fact that this election is over I think is going create some calming of the waters and you know, when you have the chairman of the Federal Reserve saying some stimulus of the economy would be useful.

I think, you know, the new president has an opportunity to kind of hit an economic hit right out of the gate. We saw that with President Clinton. It worked. It got the economy moving and it reduced the deficit at the same time. There's a window of opportunity, I think, for Senator Obama, for President Obama to have a responsible, small stimulus package and have a reasonable tax package and bring confidence for the markets that -- with common sense regulations, with reasonable taxes and with reasonable spending we can make a difference here in this economy.

ROMANS: From our perspective, it looks like there has been an awful lot of tap dancing until the last couple of weeks and they've both come out with more specifics on the crisis, and I think that's because the crisis has been changing pretty much by the day. The rules have been changing so quickly. Are either of these candidates really out there saying what they would do specifically about the crisis and are they hamstrung in even doing it as they're playing defense because Paulson and Bernanke and the current administration have already set sort of the ground rules of what we're going to do heading into next year?

EAMON JAVERS, WRITER, POLITICO: That's a good point. What we've seen so far this year is a split screen or parallel universe. On the one hand you've got this amazing and fierce and brutal downturn in the economy and then on the other hand, you've got sort of the presidential campaign and the candidates seem like they're living in a different world than the world in which the financial meltdown is happening and that's because the meltdown is totally uncharted water. It doesn't really subscribe to any of the pre-planned sound bites or ideological points of view that the candidates bring in to this.

It's totally new and the candidates don't have the power as candidates to actually really affect what's going on in the economy. That's up to Paulson and Bernanke and still President Bush until January 20th. So the candidates are sort of outside the loop here and it's been very weird, actually, to watch them try to impact the discussion on the other side of that splits screen. After the election we'll have to see a merging of those two things and whoever the president elect is is going to have to come up with some kind of grand plan. We haven't seen that yet for what we'll do with the economy going forward.

VELSHI: Leslie, this too, shall pass. They always do, you can always look at any chart and Christine and I constantly complain because there's a scoreboard for the market it gets all of our attention. The issue will be taxes and jobs.

JAVERS: That's right.

VELSHI: We are closer with these two candidates and understanding their positions. We've lost three-quarters of a million. Senator Obama view on raising minimum wage becomes more attractive. What is Senator McCain going talk about in terms of creating jobs? He talks about cutting taxes. Tell us why we think that will create jobs?

SANCHEZ: Well he talks about cutting the corporate tax rate because we have the second highest tax rate globally in the world, but it's a stimulus for business to continue to grow, to feel confident that they can continue to have the human capital here, be competitive with their global competitors and still be able to energize these markets for the future. Think about it if you don't. You're raising minimum wage and Barack Obama wants to tie it to inflation.

VELSHI: Our minimum wage is insulting.

ROMANS: I'm going challenge you on this, because when you do studies, there have been many studies that have been done on this, when you study it the states that raise the minimum wage have higher job growth than states that don't. That might be because they're already in a better position, but it's not a one-two economically that you raise the minimum wage and it creates jobs.

SANCHEZ: A lot of what he's talking about not only in his penalizing a lot of these people because of the way they file. They are small business owners and that is a real growth. They're very limited and so much gets lost in the details and you don't really know what's going to come out of these packages and that is the patchwork of economic plans where you fundamentally feel that people don't understand the problem.

VELSHI: OK. Hillary hang on. We'll get your explanation on the other side of this thing. We're going to take a break because this is important. Small businesses are the driver of jobs in this country. How are they going survive in this credit crunch, in this market turmoil and with unemployment the way it is without people who will buy what you're selling.

ROMANS: That's right. How to get a job if you're unemployed and how to keep one if you already got one. Jobs are what this is all about.

(COMMERCIAL BREAK) WHITFIELD: Hello. I'm Fredericka Whitfield in Atlanta. In politics the focus is on battleground territories. Senator John McCain is campaigning in New Mexico today and just moments ago he wrapped up a rally in Albuquerque and now he moves on to El Paso.

Senator Barack Obama is back on the campaign trail after a trip to Hawaii to see his sick grandmother. You're looking at live pictures right now. Obama taking part in this change we need rally in Reno, Nevada and you can watch the rally at CNN.com. He talks to New Mexico voters later on this evening.

In Chicago police are not confirming it, but a Chicago woman says police have questioned her son about the killings of Oscar winner Jennifer Hudson's mother and brother. Michelle Balfour also pleaded for the return of Hudson's 7-year-old nephew Julian King. An amber alert has been issued and police are searching for a white Chevy Suburban with Illinois tags.

Coming up at the top of the hour, "Ballot Bowl." Now back to more of YOUR MONEY.

(BEGIN VIDEO CLIP)

SENATOR BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I will put a tax cut in the pockets of working people so they can pay their bills, put away some savings and pass on a brighter future for their children.

SENATOR JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: The McCain/Palin tax cut is the real thing. We will double the child deduction for every family. We will cut the capital gains tax and we'll cut businesses taxes to help create jobs and keep American business in America.

(END VIDEO CLIP)

VELSHI: All right. We're joined again by political writer Eamon Javers, Republican analyst Leslie Sanchez and Democratic analyst Hillary Rosen both of whom are also CNN contributors.

Hillary we just before the break heard from Leslie outlining John McCain's idea about how you create jobs by giving businesses a tax cut and allowing them a little bit more money in order to employ people hopefully and the idea that Senator Obama has about increasing the minimum wage might be damaging to small businesses. Small businesses remain the generator of new jobs in this country, but they are being hit hard by this credit crunch and obviously by the fact that people don't have the same money to spend at their businesses.

What do you suggest?

ROSEN: A couple of points, I think Senator Obama, the one place where he did refine his economic plan in response to this crisis over the last couple of weeks is focusing like a laser beam on small business. He created a new plan for giving small business a higher tax credit for every new employee as well as opening up the small business administration loan guarantee program and even wider to make sure that credit is available to small businesses. I just think Obama is winning on the tax message for two particular reasons. Despite what Leslie and some other Republicans are saying. You don't really hear CEOs over the last several weeks of this credit crisis and financial crises say the reason why we're laying off jobs, the reason why we're not making sales. The reason why our businesses are sinking is because our taxes are too high. It used to be in the old days companies would complain about high taxes, but our tax rates are low enough now that they're not saying that they need a tax cut.

So I think that that argument is really kind of off the table as a rationale for stimulating business. It's just not been there. So the people who are saying they need a tax cut, the ones who are paying their daily bills are individuals who actually are as we all know are much higher. They're the ones who need it.

SANCHEZ: Hillary with all do respect to that. Where it doesn't connect is the fact that the people -- it's very much what Ali was saying. The people that are feeling the burden are the small business owners. If you look at this credit crunch and the fact that this had been down economically to all of the vendors. To all of the vendors, I'm talking about.

The impact that it's having in terms of the credit limitations have people concerned about the tax implications and has people concerned about does Barack Obama have the right plan? It's a patchwork of ideas. It seems like he's doing to prevent defense. Look at the great example with Senator McCain when he came out with the tax incentive for basically seniors who would be tapping into their retirement savings.

For giving them more flexibility, by the end of the day Barack Obama was saying, yes me too, I agree with that.

ROMANS: There are a couple of places where both candidates agree on he crises measures on this and seniors now when they're 70 and a half have to start tapping into their 401(k) or their IRA.

VELSHI: Taxation on unemployment benefits.

ROMANS: There's a couple of places where they actually, where both agree on for the crisis measures to this and that's of them -- seniors now when they're 70 and a half have to start topping on their 401(k) or IRA.

ROMANS: Taxation and unemployment, there was a couple of places where they do agree, you know Barack Obama would like to a second stimulus, John McCain has been more circumspection let's not just draw $150 billion or $300, that's something -- we're open to it, but not in sort of running after another stimulus right away.

ROMANS: Do presidents give too much credit and too much blame for being able to create jobs --

JAVERS: Absolutely.

ROMANS: Because isn't there something called a Congress which doesn't have actually always go out with them and then now the American people are pretty upset about how much money they've been spending.

JAVERS: That's right and there's also something called the global economy, right? I mean, there is no dial in the Oval Office where the President can sort of turn the dial and turn up the number of jobs in this country. And turn it down and turn down the number of jobs in this country, that's just not how it works.

Presidents don't have that kind of control. They do, politically though, get the credit if the economy is good and they get the blame if the economy's in the tank.

What's been fascinating about watching this debate over the past couple of weeks here, is how small bore some of these proposals from both the McCain camp and the Obama camp seem in comparison to the scale of the global economic wipeout that we're seeing.

Adjusting 401(k), --

VELSHI: Eamon isn't that what people want because they don't understand this crisis? They don't understand why the DOW is up hundreds of points but up. And they don't understand the scale of the global credit crisis, well, they'd like at least to understand what they're going do for me.

JAVERS: Right, what's scary here is that they're really are no wise men, right? I mean, we always say, oh the voters don't understand this, but there are wise men in Washington who do understand it.

VELSHI: Right.

JAVERS: But right now, there are no wise men in Washington who understand this any better than the average voter at this point.

ROMANS: Even Alan Greenspan went before Congress this weekend and said that he miscalculated, that he didn't understand that this would happen in the credit markets and --

JAVERS: He said this goes against 40 years of his understanding of what's -- how economies worked fundamentally, that's sort of scary for those of us who put a lot of stock in Alan Greenspan over the years and said well, there's a steady hand in Washington.

And now the question is, which of these candidates is going to put in to place some kind of solution that nobody in the political system so far has been able to come up with. That's a daunting challenge. LESLIE SANCHEZ, CNN CONTRIBUTOR: There is an interesting thing that psychologically you have seeing in the polls when it comes to the economic issue because it's so confusing and there's not a lot of confidence in either candidate in their economic plan to be fair and be very truthful about it. So they're saying who's character, that's why the issue here of character, Democrats will push back and say that's really not case, but that really is fundamentally where this final kind of five or six percent of Independent undecided voters are focusing. Who do I trust the most to make the right decision?

ROMANS: It comes down to leadership who is the leader that in general has the vision for where we want to take the country, to put it in terms of a McCain adviser Doug Roth Eakin. I mean, that's what he said. I mean, this is our vision for the future but we know the things are going to be changing.

I mean Hillary? Is that what it comes down to, we just have to trust which candidate and in your case the candidate you tend to lean?

HILARY ROSEN, CNN CONTRIBUTOR: You know, you guys are just making stuff up. I'm going to love you, but what we know is from the polls people do believe that Barack Obama has some leadership here on this economic crisis.

That he's getting well over 50 percent. He's doing better on people's perception of his ability to handle the economy than he is overall on his election results. So this is not being -- you know, fabricated here. There is a sense that some steady leadership, somebody who comes into -- after November 4th and announces an economic team quickly, brings back some thoughtful, wise people who are a little more regulatory focused than Alan Greenspan who is willing to let the free markets do whatever they want.

But somebody who is not going to be a wild spender, is what the folks are looking for and that is resonating. That is why Obama is ahead.

JAVERS: You know what's amazing here, if I can just jump in for a second. What's amazing here is how McCain's campaign sort of imploded basically over the space of about three days when this economic crisis first happened. And we saw that the race at that point was basically tied and ever since then John McCain sort of came back to Washington and left Washington and was he going to debate and was he not going debate. And ever since that moment, Obama in the polls seems to have been opening a little bit more daylight each day between himself and John McCain. Anything can happen here.

SANCHEZ: The bottom line, in polls historically, we know that when you have an economic downturn people punish the party in power and they want to give somebody else a fresh start maybe, a different perspective. That what you're seeing here has nothing to do with Senator Barack Obama's leadership. Or some epiphany, it has to do with history -- it has to do with economics.

VELSHI: All of you have brought us some great points about this and in the end it's going to be for you to decide who you think is going to get you out of this. ROMANS: How many are they. I know, I know.

VELSHI: It just feels like one long day, doesn't it to all of us thank you?

SANCHEZ: With wardrobe changes.

VELSHI: Thank you.

ROSEN: I'll feel better when this election's over now.

VELSHI: Oh, I hope so.

SANCHEZ: I think we agree on that.

VELSHI: One way or the other. Hilary Rosen, a pleasure to talk to you, Eamon Javers thank you for being with us and Leslie Sanchez, thank you as well.

ROMANS: All right, it's been a wild ride and there are some really important lessons we've all learned about your money. We'll tell you what those lessons are so your money can be safe in the future.

VELSHI: And get ready for some very important information. We know this all about jobs, we are going to specific information that can help you hold on to your job in these tough times.

ALLAN CHERNOFF, CNN CORRESPONDENT: For a change, it was Former Federal Reserve Chairman Alan Greenspan who was getting a lecture from Congress, not the other way around.

REP. JIM COOPER, (D) TENNESSEE: What did you do in your tenure to help Americans and help Congress understand the real numbers for America?

CHERNOFF: Some members of Congress blamed Greenspan for the financial crisis because he used to run the nation's Central Bank.

REP. HENRY WAXMAN, (D) CALIFORNIA: The Federal Reserve had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market, but its longtime Chairman Alan Greenspan rejected pleas that he intervene.

CHERNOFF: Congress's General Accounting Office in 1994 warned of the dangers of financial derivatives like mortgage-backed securities.

Greenspan, a fierce advocate of free markets and finance said at the time banks could handle any problems themselves.

WAXMAN: My question for you is simple, were you wrong?

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: Partially.

CHERNOFF: The former Fed chairman admitted he's stunned that banks failed to control their risk taking.

GREENSPAN: I made a mistake in presuming that the self-interest of organizations, specifically banks and others were such as if they were best capable of protecting their own shareholders and the equity in the firms.

I think that, as I said, shocked me. I still do not fully understand why it happened.

CHERNOFF: But Greenspan refused to take blame for what he described as a once in a century credit tsunami, arguing it's the fault of banks and other big investors who became too greedY in trying to profit from the mortgage boom.

(END VIDEOTAPE)

CHERNOFF: Some Congressmen were still interest in asking Greenspan for his forecast. He's predicting tough times, more layoffs and says, the economy won't stabilize until housing does which he says is still months away -- Christine, Ali.

(END VIDEOTAPE)

ROMANS: All right, thanks Allan.

Forget Alan Greenspan, forget Bernanke, Paulson and the others. Let's get the lessons we've learned from the past few months.

CHERNOFF: Well, this is without a doubt gut check time. We really can feel it. It's when we find out what our true risk tolerance is.

How much pain can we handle as our investments tumbled.

Some of us may have overestimate our risk tolerance by putting too much of our assets into the stock market. We're getting a brutal reminder that stocks indeed, can be volatile. Now, if this plunge is hitting the pit of your stomach and if you can't sleep then you probably do have too much exposure to stocks. It's natural.

When the market is up, we think we can take on more risk, when it's down we want less risk. Financial advisors say take this opportunity to set a long-term plan for asset allocation and stick to it. That can mean continuing your investments in the stock market even when it's down.

(BEGIN VIDEO CLIP) ERIKA SAFRAN, FINANCIAL ASSET MANAGEMENT CORPORATION: If you have a 401(k), if you're investing for college, if you're investing for your long-term retirement and you're doing it on a monthly basis, don't stop. It hurts, it's ugly, but this is the way serious wealth is built over the long term, the best way to make money is to invest when it really, really hurs.

(END VIDEO CLIP)

CHERNOFF: Of course, you don't what it to make it hurt so much that you're pressed for cash. When you do allocate investment dollars, make sure you're setting aside enough cash for at least a year of leaving expenses. Erika Safran says, that she advises some clients to put a side two years worth of cash.

That money can be put into CDs, money market funds and super safe treasury bills. Perhaps the most important take away from this financial crisis, it's only money; think of what is much more important, your health, family, friends. Even if you have lost hundreds of thousands of dollars in this plunge, you are still the same person when the stock market was at its peak.

VELSHI: Seems Pollyanna but it's true. I mean Suze Orman makes this point all of the time, just take care of yourself. It sounds so useless because you have no control of anything else.

Gerri says it all the time, you can control your debt to some degree, you can control your savings, you can control your spending, you can allocate your assets, but you can't control the rest of Wall Street. You can't control Washington. You can only control what you can. So --

CHERNOFF: And when you put your money in the markets you have to recognize that. You're pretty much placing a bet. I mean, it's not like going to Vegas although -- it could seem that way. But it's a long-term -- a long term investment and you're hoping that in the long term, five, ten, 15, 20 years down the road you will have made much more.

VELSHI: My mother was very pleased when she heard me say earlier on TV that I've been Romanized -- I've been Christine Romanized, because Christine has been telling me for years that my lifestyle might need a little curtailing. And for no particular reason other than the fact that this is just a big reminder. And you know what may be go without a little bit, maybe --

ROMANS: It's the Sominex (ph) test. The way that Americans begin living their lives, I can't sleep at night like that and it's almost like well there's a reason why I personally can't sleep at night I like that. It was a good thing that I didn't have too much exposure or I wouldn't be sleeping in the night very well right now that it's --

VELSHI: Solid advice from Alan on this one.

ROMANS: Yes. VELSHI: Look after yourself first.

ROMANS: Thanks, Allan.

VELSHI: Thanks, Allan.

ROMANS: Ok, let's get ready to talk jobs, how to keep one, how to get one.

VELSHI: And this is going to be the issue in the months to come, by the way, once these markets start to settle down so you've got to see this segment; we've got a very specific advice for you.

(COMMERCIAL BREAK)

ROMANS: We've seen new layoffs announced just this week; everything from Goldman Sachs, Merck, Yahoo, Chrysler, Xerox. There are others, the screen is too small to fit all the companies that were cutting jobs this week and that's where we are in this economy. Which is why we want to help you recession-proof your job, make sure you keep your job or find a new one if you need to in this tough economy.

We are very pleased to have Brad Karsh, the president and founder of Job Bound and also Employment Attorney Robin Bond. We're going to try to help you figure out how to take control of something you do have control over in this economy and that is your job.

Brad, let me start with you first, this is layoff season, isn't it.

I mean we're coming into the end of the year, it seems to me just for my own you know personal experience from people I know and things that would happen with companies I have works for that this is the time of year that we start to hear about the people who will not be around next year.

BRAD KARSH, PRESIDENT AND FOUNDER, JOBBOUND: Absolutely. And you just read a list of some pretty prominent companies that are going through layoffs and the assumption is that it's only going continue.

ROMANS: It's going to continue how? I mean, do we think that there's every different kind of industry in certain different industries and should we be looking for a layoffs now or into next year?

KARSH: Well, the assumption is that given everything that's going on with the markets there is going to be a continued string of layoffs across the varieties of different companies spanning all different types of industries. And I think right now as an employee you have to think about what can I do to make sure that if our company does go through a layoff I'm prepared to survive it.

ROMANS: I'm going to get Robins perspective on that in a minutes. But let's stick with you and I want you to go through those points you have for securing your job. I mean, this is now the time to be making yourself indispensable at the office isn't it?

KARSH: Exactly, one of the things that I say is you want to try and become "the person" and by that I mean we can't let go of Milo, he's the new business person. Or we can't let Lisa go she's the client relationship business.

So whatever is important to your company and whatever you might be able to form a niche in, that's what you want to be pushing for right now, make yourself indispensable.

ROMANS: At the same time though, network within the company because you don't want to be just tagged as one certain kind of worker. You want everybody to know, hey listen if you're getting rid of a certain department I can take on additional responsibilities and I can work for this other guy if I have to and this other girl, if I have to.

KARSH: Yes, there are a couple of things there. One is absolutely this role of networking and we think of networking and we think of it only in terms of getting a job. But when companies go through with layoffs, typically what they end up doing is a room full of people and it's usually not your boss and it's going to be senior managers are deciding who is going to get let go and who isn't.

And if those senior people have no idea who you are, it really harms your chances when it comes to staying around. So form that relationship with the senior manager if you can and even from going to the company's softball games to making sure you say hi at the company party.

ROMANS: And Robin, you say, you have similar advice. Bring your A- game to work. You've got to get along. What are some of the things you've got to do?

ROBIN BOND, EMPLOYMENT ATTORNEY: Well, you've got to perform and you've to get all your work done well and on time. But as they always say, it doesn't help if you're pulling a rabbit out of the hat if the boss doesn't see the rabbit, right?

ROBINS: Right.

BOND: So you have to make sure that when you do something well, or when clients give you a positive Kudo, meaning that a girl or that a boy, make sure the boss sees it and pass that kind of stuff along, save it and make sure that everyone knows it.

Now, corporations are not meritocracies, all right, so you perform well and you think you're doing a great job and that's going save you, but the bottom line is people make decisions on who they like. So in addition to doing well and being an A player, being perceived as bringing you're A-game to work each and every day, you have to get along well with your boss.

For example, I just had a person I've been working with who was performing really well. I mean it's like 600 percent above target, thinking his job was very secure.

But he was consistently fighting with his boss publicly, challenging his boss, arguing with his boss publicly. And when it came (AUDIO GAP) picked him. He's like, why did this happen to me? And the bottom line is, you have to get along to stay employed today.

ROMANS: Robin, what do you do if you've lost that job I mean, because you could do everything right and if a bean counter you know two steps of the later and to decide that 20 people are going to be fired, you know you could be in a particular office or part of the company that's just been slated to be closed. What do you do?

BOND: One of the things you have to do too in terms of securing a job too is, make sure you are a profit center, even if you're just a support person, like an I.T. person, a human resources person, admin assistant. I always when I worked corporate tried to demonstrate to my boss on an ongoing basis throughout the year things I did to save money or help the bottom line or bring value to the company, make a boss look good.

For example, saying I helped work on this risk management program and that helped implement cost savings or reduced the accidents by x percent. Show people how you save money in an objective, measurable, quantifiable way. People respond -- bean counters respond very well to that.

ROMANS: Well, I mean, no disrespect to the bean counters. I mean we need them. They're why companies grow. But I'm just saying, you know I -- for a long time have been saying on the air, make sure you know which five percent you're in. Are you in the top five percent of your group, or the bottom five percent, somewhere in the middle?

And a couple of my friends in corporate America called me up and said oh, no, managers have laid off the top 20 percent and bottom 20 percent. They are as much more specific in this economy how many people could be cut, I think. What do you do if you've just found yourself on the wrong end of the pink slip?

KARSH: Obviously, this is a tough market to get back into the job market. But there are a couple of things I advise. The first piece of advice is, take a deep breath, take a pause. When we lose our job, our first tendency is to jump exactly back into what we were doing before.

And I've worked with a lot of people who've lost their jobs and said, you know Brad, I took a couple of weeks. And thought I really don't like what I'm doing. I really am not happy with this career and have used it to spring board to different careers and different options.

If you have a little bit of time, there are a couple of things you can do. The first thing you want to make sure that you do is get your foot in the door somewhere. So it's not going to be the best market to get the exact same job at the exact same pay.

So look at small companies. Look at medium-sized companies. Look at even expanding geographies or just getting in somewhere and then prove yourself when you're on the job.

ROMANS: All right, Brad Karsh, we have to leave it there; President and founder of Jobbound. Thank you so much.

Also Robin Bond, employment attorney.

We're going to help you recession-proof your life and recession-proof your money. But first, "Right on Your Money."

(BEGIN VIDEO CLIP)

ROMANS: In turbulent times, a safe investment is as good as gold. Gold is looked at as a secure place to put your money but with the price of gold spiking over the past few years, is now the right time to invest?

FRANK HOLMES, CEO, U.S. GLOBAL INVESTORS: I think that that exposure is just prudent for investors.

ROMANS: Investors have three options, purchase the physical asset, purchase an ETF that replicates the price of gold or trade futures and options in the commodities market. Generally the most conservative way to invest, purchase bullion or gold coins.

F. HOLMES: This bouillon itself has over performed the gold stocks, as gold stocks have been a source of liquidity, they've been pounded down.

ROMANS: But investing in gold these days is really about diversifying your assets.

F. HOLMES: You don't buy gold to get rich. It's like having car insurance. You don't buy it so you can have an accident to collect. You just want to make sure that you have some exposure to the asset class. And we've always advocated that investors consider five percent into bouillon or golden fiat and five percent into unhedged gold stocks.

ROMANS: And that's this week's "Right on Your Money."

(COMMERCIAL BREAK)

VELSHI: This is a special emergency edition of "YOUR MONEY."

ROMANS: Now back to where we started with some final thoughts on how you should be handling your money right now.

Gary Ambrose is the senior financial consultant from Personal Capital Management; Greg Olsen is the partner at the wealth management firm Lenox Advisors; Lakshman Achuthan is the managing director of the Economic Cycle Research Institute.

Lakshman, quick thoughts from you, given where you said we are in the economic cycle. We may have a long way to go. Maybe another eight, or nine months in this recession; that's got people really, really fearful. But you've seen these many, many times. How fearful should we be?

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Well, you batten down the hatches for some tough times, for the next couple of quarters. That's the amount of fear that's appropriate here. Say hi to your boss. That's the number one thing to do.

And, also, there's a silver lining here. Prices are plunging ok, across the board. There was a huge policy mistake by all of the leaders globally where they were freaking out about inflation when it was recession which was the issue. This is a consumer's friend at the moment. A lot of senior's have a cost of living adjustment that's been very nice and prices are falling. That's a nice combination.

The other is, so many people work at small businesses. Small businesses can be particularly nimble in a downturn and go out with a value proposition and that ensures your job.

ROMANS: All right Greg, what do you think? What is the take-away for people who are really concerned about their personal economy right now?

GREG OLSEN, LENOX ADVISORS: As long as you have that year to 18 months of living expenses --

ROMANS: What if you don't? I'm worried about the people who don't, that's the thing. And how do you get there?

I mean, if you're looking at a car payment when maybe you can't sell the car and you're looking at a health payment that you probably you can't make and you're also -- it's going to cost more to heat your house still this winter than it did last year, then what do you do?

OLSEN: Say hi to your boss.

ROMANS: Show up on time.

OLSEN: Exactly.

What you really have to do -- is you have to start -- that person has to start cutting expenses. I don't want to tell all Americans to start cutting expenses because then we're going to go into a deep recession. But you've got to start watching expenses. And things that are unnecessary, you could start getting rid of.

I mean you could take public transportation and not take a taxi. I mean, just everything adds up over time. And you're so surprised at the end of the week or the month how much extra that you saved and start putting that towards your cushion.

But for those people, you have to remember that this is going to play out. The economy is not coming to an end. America will exist. And if you're a long-term investor, if you're that 45-year-old person that's looking at your 401(k), we will come out of this.

Stop staring at the screen all day. And get back to working because you might lose your job that way.

VELSHI: All right, Gary, we had some tips for you earlier. So thank you for those. This guys has said batten down the hatches. You've told us how to cut the things out but you cant cut out but don't cut the things out that you really need including insurance. The majority of you out there say the economy is issue number one. And we at CNN are committed to continuing to cover it for you.